Earlier in the day, the Sensex climbed to a record 36,747.87 on the back of an overnight rally on the Wall Street. The S&P 500 Index climbed back to its highest in almost six months after Federal Reserve Chair Jerome Powell delivered an upbeat view of the U.S. economy. Powell said that the job market in the world's largest economy remained robust and inflation was likely to remain near the target level for coming years.

Sageraj Bariya, vice president of institutional sales at Mumbai-based East India Securities, said "Powell's testimony was music to investors' ears" and that "the hush in trade war banter (between the U.S. and China) had provided a breathing space for investors to focus on earnings."

The Indian equities were poised to extend the rally once investors get "acclimatized to the higher altitude," he added.

The decline in the offshore-traded Chinese yuan to its lowest level against the dollar in more than a year contributed to the intraday turnaround on the Sensex and other regional indexes. The offshore-traded yuan dropped 0.5% against the dollar to below the psychologically important 6.75 level.

Hindustan Unilever declined 2.4%, adding to its losses on Tuesday after its first-quarter earnings. While the company's sales volume surprised positively, at least two brokerages downgraded the stock, citing valuations.

Tata Motors dropped 2.2%. Media reports said the company will raise prices of its passenger vehicles by up to 2.2% from next month to offset higher input costs.

Zee Entertainment Enterprises climbed 0.8% to 521.40 rupees after reporting a 31% rise in net profit for the June quarter, helped by higher subscription revenue and a revival in adverting spending.

Morgan Stanley said in a note that industry advertisement spending is likely to remain robust, which bodes well for the company. It pointed out that domestic advertising growth of around 22% was better than expected, and maintained the `overweight' rating and the target price of 610 rupees per share.